Goldleaf narrows full year net losses

Source: Goldleaf Financial Solutions

Goldleaf Financial Solutions (NASDAQ: GFSI), a provider of integrated technology-based solutions designed to improve the performance of financial institutions, today announced financial results for three-month and twelve-month periods ended December 31, 2007.

Revenue for the fourth quarter ended December 31, 2007 totaled $14.5 million, a 4% increase when compared to the year-ago quarter. This increase is principally due to continued growth in our payments processing business and related acquisitions.

Operating income totaled $1.0 million for the fourth quarter of 2007 compared to a loss of $3.0 million for the same period of 2006. Net loss available to common stockholders was approximately $0.4 million, or $(0.03) per share, for the fourth quarter of 2007, versus a net loss available to common stockholders of $20.3 million, or $(1.33) per share, for the fourth quarter of 2006. Included in fourth quarter loss figure is approximately $1.3 million in income tax provision related to the adoption of FASB No. 48, valuation allowance against certain NOL's, and an expense related to a reversal in stock compensation benefits on options.

For the twelve-month period ended December 31, 2007, revenue totaled $56.7 million, as compared to $55.7 million for the same twelve-month period of 2006.

Operating income totaled $1.3 million for the twelve-month period concluding December 31, 2007 as compared to operating loss of $1.1 million for the same period of 2006. Operating income for the twelve-month period of 2007 was negatively impacted by approximately $0.6 million of charges related to severance costs while operating income for the twelve-month period of 2006 includes a $1.6 million write-off of debt issuance costs. Net loss available to common stockholders totaled approximately $0.6 million, or $(0.03) per share, for the twelve-month period of 2007, as compared to a net loss available to common stockholders of approximately $22.4 million, or $(3.62) per share, for the comparable year-ago period which included a charge of approximately $19.4 million related to preferred stock dividends and distributions.

Revenue and operating results for the three and twelve month periods ended December 31, 2007 excluded approximately $0.2 million and $1.0 million, respectively, of deferred revenue of CBS and Datatrade, which could not be recognized in the post acquisition financial statements.

EBITDAS is a non-GAAP financial measurement calculated as earnings before interest, taxes, depreciation, amortization and non-cash stock based compensation expense. EBITDAS totaled $2.3 million and $6.0 million, for the three-month and twelve-month periods of 2007, respectively, which compares to $1.4 million and $7.1 million for the same periods of 2006, respectively.

Commenting on recent activities and the quarter, Goldleaf Chief Executive Officer, Lynn Boggs, stated, "Fiscal 2007 reflects our continued efforts to pursue a broadened product offering to meet the technology needs of financial institutions. We furthered these efforts with two acquisitions and organic growth in our payment processing business. The acquisition of Alogent in early 2008 greatly enhances our payments processing offering and allows us to serve all sizes of financial institutions with products that are offered in both an in-house and service bureau environment.

"We believe the unaudited pre-tax net income for Alogent's three-months ended December 31, 2007 was approximately $2.2 million including depreciation of approximately $35,000. Our results continue to demonstrate sound growth from our transaction processing offerings offset by continued weakness in our accounts receivable lending business. While the accounts receivable business continues to generate meaningful cash flows, we also recognize that the decreasing revenues have an impact on our overall growth rate and margins. As we enter 2008, we are extremely excited about the impact of the Alogent deal and the accelerating revenue and EBITDAS growth potential from the change in revenue mix weighted more toward payment processing.

"We maintain our belief that increasing opportunities within the transaction processing space, coupled with expense management and a prudent acquisition strategy, should yield long-term benefits and value to Goldleaf and its shareholders."

The following is forward-looking and actual results may differ materially from those defined below. The Company's outlook includes the effect of all acquisitions completed to date. Further, this outlook does not give effect to any additional potential mergers or acquisitions that may be consummated.

The Company anticipates achieving pro-forma revenues for fiscal year 2008 of approximately $87.0 million and pro-forma EBITDAS of approximately $15.0 million. These full-year proforma estimates assume the acquisition of Alogent as if it occurred on December 31, 2007 and with respect to EBITDAS, are adjusted for non-recurring expense items related to the Alogent transaction.

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